90% French Wealth Tax! Britain may be an attractive option for relocation

10 Jul 2024, 41 mins ago

The use of tactical voting from the French electorate pushed Marine Le Pen’s hard-right National Rally to third place, while squeezing Macron’s centrist Renaissance Party into second. Led by figures such as hard-left Jean-Luc Mélenchon, the NFP has flirted with a new wealth tax and increased spending on the green transition. Political, legal and institutional challenges have escalated fears of greater uncertainty, which has pushed many French citizens to consider a move overseas.

Could disruption in France affect my wealth?  

As the left-wing alliance has collectively won the most seats, it is expected that they will assume Prime Ministerial power and governance. However, the fact that no clear party has a majority could lead to a period of medium-to-long-term instability as each party jockeys for recognition and position.

During their respective campaigns, parties of the left-wing alliance have put forward various ambitious policies, such as raising minimum wage, lowering the retirement age and introducing price controls, as well as increased spending including raises in public sector pay. However, many figures have raised the alarm that this could lead to a raid on the finances of middle-income and high-income earners, as well as those with significant assets structured in the French jurisdiction.

The coalition, should they take power, also faces twin-track legal and fiscal challenges. Legally, as stated by Sébastien Maillard, special adviser to the independent Paris think-tank the Jacques Delors Institute, attempts to introduce price controls may breach EU rules, such as the Stability and Growth Pact.

Fiscally, France’s debt remains high relative to GDP, at 110.6% of GDP in 2023, which led to France facing disciplinary measures and restrictions to spending by the EU Commission. Any further spending plans which would increase government debt may also create risks for France’s long-term economic future.

What are my options?

Instability in France could affect your wealth. According to Reuters, on the Monday following Macron’s announcement of a snap election, the CAC 40 stocks index was down 3.7%, and shares in France’s biggest credit institutions, BNP Paribas, Société Generale and Credit Agricole dropped as much as 9.8%. The UK offers an alternative pathway for you to protect your assets, experience lower personal and business taxes and generally weather the storm in France, making the UK a post-election contingency plan to reduce the exposure to economic and political instability that France may soon experience.

Advantages of a move to the UK include:

  • The UK has no wealth tax, Keir Starmer’s newly elected Labour Party has committed to not raising Income Tax, VAT, or National Insurance contributions;
  • The cost of living is generally lower in the UK than France;
  • France features higher corporation tax: 33.33% vs UK’s 25% corporation tax (or 19% for companies with profits under £50,000).

How can I make a move to the UK?

The legal requirements you will need to meet to move to the UK will depend on your specific circumstances.  Some examples of options which may be open to you include the Skilled Worker visa which would allow you to come and work in the UK for an employer, the Innovator Founder visa to set up a new business in the UK, or the Expansion Worker visa to establish a branch of an overseas business in the UK.

How Gherson can assist

Gherson’s Immigration Team are highly experienced in advising on UK nationality, citizenship and immigration matters, including delivering bespoke advice or preparing discretionary applications. If you have any questions arising from this blog, please do not hesitate to contact us for advice, or send us an e-mail. Don’t forget to follow us on XFacebookInstagram, or LinkedIn to stay-up-to-date.

The information contained in this blog is provided for general informational purposes only and therefore does not constitute financial advice. Gherson is not authorised by the Financial Conduct Authority to provide financial advice, nor does Gherson purport to be. Whilst we strive for accuracy, this information is not a substitute for financial advice, and we strongly recommend that you seek advice from a licenced financial professional to address any specific concerns. Gherson accepts no liability for loss which may arise from reliance on this information.

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